PR930276 PR930276 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170CE application for relief in respect of termination of employment Glen Patterson and VSL Prestressing (Australia) Pty Ltd (U2002/1643) COMMISSIONER HARRISON MELBOURNE, 10 APRIL 2003 Alleged unlawful termination. DECISION [1] This is an application by Mr Glen Patterson (the applicant) lodged pursuant to s.170CE of the Workplace Relations Act 1996 (the Act) for relief regarding the termination of his employment by VSL Prestressing (Australia) Pty Ltd (the respondent) on the grounds that the termination was harsh, unjust or unreasonable. [2] The applicant was represented by Mr J Berwick of Counsel and the respondent was represented by Mr D Murray of the Master Builders Association. [3] The following witnesses gave evidence during proceedings: Applicant · Mr Glen Patterson (the applicant) · Mr Aldo Muzi, former employee · Mr Bruce Redwood, former supervisor · Mr Christopher Cafe, building supervisor Respondent · Mr Anthony Pash, Chief Financial Officer · Mr Michael Holland, Construction supervisor · Mr McCotter, Systems Manager Background [4] The applicant commenced employment with the company on 12 January 1986 as a leading hand, and soon after become a foreman. [5] The applicant continued as a foreman with the company until 19 March 2002 when his employment with the company was terminated. [6] The letter of termination was as follows 1 : "Dear Glen, The company is experiencing commercial difficulties at present with current projects coming to an end and very few new projects in hand or being tendered. These conditions are not likely to change for some considerable time. This means that we must reduce our current workforce levels. Unfortunately, this is to advise you that your position is redundant as at Tuesday 19th March, 2002. As a result your employment with us will be terminated. In the past VSL had paid out one weeks severance pay on termination of site staff which was well above the award requirements. However, due to your seniority and length of service the company will pay you four weeks severance pay plus all of your award entitlements. These funds will be transferred into your account on the evening of Wednesday 20th March, 2002. We would like to assist you in obtaining a position with another employer and to this end we are happy to help you prepare and type, an "up to date" C.V. In addition to this, a reference will be supplied on request. There is a possibility that market conditions will change in the future and we may need to expand our workforce at that time. Finally, I would appreciate it if you would let me know how else we may reasonably assist." [7] Evidence was led by the company that the termination was a genuine redundancy. It was based on the operational requirements of the business due to a down turn in business as well as the company being too top heavy with foremen to be organisationally efficient. It was argued that the applicant was chosen for redundancy based on a selection criteria that had been used on previous occasions when redundancies were necessary. [8] During the process of selecting a candidate for redundancy, three foremen including the applicant were ranked equal last. In order to break the tie, Mr Holland, a company supervisor, chose the applicant due to previous warnings having been issued to him. [9] The previous warnings included one on 17 August 2001 when the applicant was warned for failing to discharge his responsibilities as a foreman. He "had not submitted quality assurance documentation, had failed to ensure that work for which he was responsible was properly completed, and had failed to look after and return company-owned equipment" 2 . This warning involved an allegation of poor workmanship in relation to the finishing of "pans". [10] The second warning was in relation to the applicant's excessive personal use of a company mobile telephone. [11] The applicant however, maintained that he was unaware of any selection criteria and that the termination was not a genuine redundancy. The applicant also contended that Mr Holland was not in a position to objectively rate the applicant and that in any event he was not given an adequate opportunity to respond to the allegations. FACTS AND EVIDENCE Applicant's Submissions and Evidence [12] It was the applicant's evidence that he was unaware of the existence of any rating system used by the respondent. He also contended that Mr Holland was in no position to sensibly rate the applicant as since the time Mr Holland was his supervisor, the applicant had not been in control of a project. [13] In relation to the warnings given to the applicant dated 17 August 2001 and 14 January 2002, it is the applicant's evidence that he had never seen any such document or even heard there was such a system in place. He believed that during his 16 years of employment with the respondent he was never issued with a warning of that kind. [14] In response to the specific warnings, the applicant's evidence is that the document is a "self-serving, contrived and exaggerated statement" 3 of his non-compliance. [15] In relation to the first warning, concerning the applicant's quality assurance documentation not being suitably maintained, the applicant argued that at the time he was on holidays in New Zealand. As soon as the applicant was informed of the alleged breach, he informed Mr Holland that "the documentation had been properly maintained and was in his car" 4 . However, in his outline of argument the applicant stated: " On returning and being issued with this document he immediately informed Mr Holland ... " 5 [16] I find that this is inconsistent with his earlier assertion in paragraph 21 of his outline of argument that: " This is the first time he has ever seen a document with this title or heard that the company had such a system in place." 6 [17] In response to the second warning for making excessive personal phone calls, the applicant's evidence was that there was an arrangement with Mr Holland and the accounts person in regard to his mobile usage that any amounts for personal calls would be taken out of his pay 7 . [18] Mr Patterson's evidence was that at the time he was going through a domestic difficulty with his partner. His excessive use of the telephone was due to his constant contact with his partner trying to resolve the issues. He maintained that he had an arrangement that allowed him to use his mobile phone for personal use to the extent that he had and also that other employees had been in similar personal difficulties and had been allowed to use the mobile phone for personal use during this time. No evidence was offered to corroborate this assertion. [19] Mr Aldo Muzi gave evidence attesting to the applicant's skills. He also gave evidence in relation to pans and the difficulty they pose on construction sites. [20] Under cross-examination Mr Muzi conceded that if pans are a big issue and if they are not completed correctly, it causes problems for a number of trades people. [21] Mr Muzi also conceded that he was not in a position to compare the applicant with any other foremen employees of the respondent. [22] Mr Redwood, a former supervisor of the respondent, gave evidence for the applicant. He attested to the applicant's competency as a foreman. It was Mr Redwood's evidence that he used a rating system devised by himself which was used until he ceased employment with the respondent in October 2000. He further stated that he had never seen the type of rating form that Mr Holland used. [23] Both Mr Muzi and Mr Redwood stated that in relation to pans the applicant was no better or worse than anyone else conducting similar work. Respondent's Submissions and Evidence [24] It was the respondent's submission that the nature of its work in the construction industry was project based and the availability of work for its employees fluctuated from time to time. [25] Mr Murray submitted that the respondent had experienced a downturn in business necessitating a number of retrenchments over a period of time. [26] It was Mr Holland's evidence that the rating system used to evaluate the relative skills and knowledge of employees and their punctuality, length of service and other criteria was an agreed process reached with the company's consultative committee. [27] Section 170CG(3) provides that in determining, for the purposes of arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to: a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and b) whether the employee was notified of that reason; and c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and d) if the termination related to unsatisfactory performance by the employee - whether the employee had been warned about that unsatisfactory performance before the termination; and (e) any other matters that the Commissioner considers relevant. Section 170CG(3)(a) - Was there a valid reason? [28] The definition of a "valid reason" was addressed by Northrop J in Selvachandran v Peteron Plastics Pty Ltd 8 : " the reason must be valid in the context of the employee's capacity or conduct or based upon the operations requirements of the employer's business " 9 [29] The term "operational requirements of the employer's undertaking establishment or service" as it appears in section 170CG)(3)(a) encompasses redundancies. [30] I am satisfied, having considered all the evidence, that it was open to the respondent after reviewing it's financial circumstances, to decide that redundancies were required. However, in this matter, it is also clear from the evidence that although the underlying reason for the applicant's termination of employment was redundancy, the reasons for his being chosen related to his capacity and conduct, in particular the rating system and previous warnings. [31] I find that the selection criteria used by Mr Holland was relevant and appropriate. Although evidence was given that previously under Mr Redwood the applicant was rated in the top 3 or 4, I do not believe that this detracts from Mr Holland's later assessment of the applicant. As the construction supervisor, it was his responsibility to make an assessment and decision. [32] In relation to the warnings, I find that they were a relevant factor in the decision making process. [33] I am satisfied that there was a valid reason for the termination of the applicant's employment based upon the respondent's operational requirements. Was the applicant notified of the reason? [34] It was the applicant's evidence that on the day of his termination he was shown a document that was his rating. I am therefore satisfied that the applicant was notified of the reason for the termination of his employment as set out in section 170CG(3)(b). Was the applicant given an opportunity to respond? [35] It was the evidence of both the applicant and the respondent that after being shown the rating he commented "This is a load of shit" 10 . [36] The applicant states that he made this comment as he was shocked to see that they had his performance documented in such detail. [37] It is also the applicant's position that he could not respond to the information contained in the document as the other names were blocked out. This meant that he did not know against whom he was being compared. [38] I do not agree with this reasoning. The company had an obligation to protect the privacy of its employees. [39] Section 170CG(3)(c) requires the employer to provide an opportunity for the employee to respond. The employer is not required to ensure that the opportunity is availed by the employee. 11 [40] Although the applicant felt he could not respond due to the other names being blacked out, I believe he had the opportunity to make further enquiries as to his ranking. However, by his own evidence, he chose not to take that opportunity. [41] The applicant did not need to know how other employees were ranked. In this case, the applicant was shown the various criteria used in Mr Holland's assessment. The applicant could have responded in relation to what he thought were his strengths against the criteria. Again, he chose not to take this path. [42] I am satisfied that the applicant had an opportunity to respond as required under section 170CG(3)(c). Was the employee warned about unsatisfactory performance? [43] Neither the applicant nor the respondent denies that warnings were issued. The applicant gave evidence that the warnings were unwarranted, however the time to take issue with the warnings was at the time they were issued. I am therefore satisfied that the applicant was warned about unsatisfactory performance before the termination of his employment. [44] The respondent is a relatively small employer without any dedicated human resource functions within its management structure. Despite this I am of the view that the procedures followed were reasonable in the circumstances given the requirements of s.170CG(3)(da) and (db). [45] Having regard to the ratings achieved by the applicant 12 it is clear that he was overall a good employee of long standing. However, when assessed against others for the purposes of selection for redundancy his skills and competence became a relative issue. [46] Having regard to all of the circumstances in this matter and for the reasons above I find that the termination of the applicant was not harsh, unjust or unreasonable. The application is therefore dismissed. BY THE COMMISSION: COMMISSIONER Printed by authority of the Commonwealth Government Printer <Price code C > 1 Attachment to Exhibit M5 2 Respondent's final submissions, paragraph 18 3 Exhibit P1, paragraph 22 4 Exhibit P1, paragraph 22 5 Exhibit P1, paragraph 22 6 Exhibit P1, paragraph 21(i) 7 Transcript, PN263 8 (1995) 62 IR 371 9 ibid, at 373 10 Transcript PN131 11 Gilbert v Taranto's Ice Cream Pty Ltd [Print R2275] 12 Assessment sheet, appendix A of Exhibit M5